Real Economy Project

The long awaited House-Senate Financial Reform Conference Committee got underway this week. Thanks to the efforts of Public Citizen, Campaign for America's Future, CMD and others, these committee meetings will be live on C-Span 3, and all amendments will be made available in advance. At BanksterUSA we are working hard to make sure that the strong derivatives language currently in the Senate version of the bill is not weakened (Sec. 716 authored by Senator Blanche Lincoln, D-Arkansas). We are keeping a whip count on the conferees and we could use your help! A whip count helps us pool intelligence on what the members are saying to their constituents. If you make a call you can post a comment to our whip list letting us know what you heard. It is grassroots activism at its best.

When the Senate bank reform legislation passed in May, Senate Majority Leader Harry Reid (D-Nevada) said it sent the message to Wall Street that they can no longer "recklessly gamble away other people's money." The bill told Main Street, "you no longer have to fear that your savings, your retirement or your home are at the mercy of greedy gamblers in big banks. And it says to them, 'never again will you be asked to bail out those big banks when they lose their risky bets,' " according to Reid.

Reid was correct. The bill the Senate passed did protect the taxpayers from reckless gambling by the big banks, largely due to the last-minute inclusion of strong derivatives reforms authored by Senator Blanche Lincoln (D-Arkansas). So why is it that Senate and House leadership are now busy behind these scenes trying to kill the best provisions in their own banking reform legislation?

Even though the bank reform bill working its way through Congress is far from perfect, there are some strong provisions well worth fighting for as the bill moves to a House-Senate conference committee.

Two recent articles illustrate the pros and cons of this behemoth bill. New York Times reporter Gretchen Morgenson, does a great job reminding us that the original Glass-Steagall legislation was only 34 pages long and it was key to keeping our financial system stable for 60 years. She points out that the two bills that the Senate and the House have now passed are a whopping 3,000 pages combined:

Yet despite all that verbiage, there are flaws in both bills that would let Wall Street continue devising financial black boxes that have the potential to go nuclear. And even if the best of both bills becomes law, investors, taxpayers and the economy will remain vulnerable to banking crises.

A lead editorial by the New York Times on May 5, 2010 parallels arguments made by the Center for Media and Democracy's "Real Economy Project" and publishers of BanksterUSA on the necessity of shrinking the "Too Big to Fail" firms and cracking down on the gambling in the derivatives market. True leadership in the aftermath of Wall Street's reckless disregard for our country's economic future requires tough reforms, not watered-down compromises in the name of "bipartisanship." With all the misinformation out there about who is really on the side of the American people and who is in the pocket of the Big Banks, now is the time for clarity, not for the sake of political expediency, but because the flawed de-regulation and market-knows-best policies of the recent past must be put in check for the health of our economic opportunities and for our nation's future prosperity.